california department of business oversight

#California department of business oversight plus#

Thereafter, “using its existing lending operations and personnel, LoanMart commenced ‘marketing’ and ‘servicing’ auto title loans purportedly made by CCBank, a small Utah-chartered bank operating out of Provo, Utah.” The DOB indicated that such loans have interest rates greater than 90 percent. According to the DBO’s press release, until the FACA became effective, LoanMart was making state-licensed auto title loans at rates above 100 percent.

#California department of business oversight plus#

In 2019, California enacted AB-539, the Fair Access to Credit Act (FACA), which, effective January 1, 2020, limits the interest rate that can be charged on loans of $2,500 to $10,000 by lenders licensed under the California Financing Law (CFL) to 36% plus the federal funds rate. On September 3, 2020, the California Department of Business Oversight (DBO) announced that it has launched a formal investigation into whether Wheels Financial Group, LLC d/b/a LoanMart, formerly one of California’s largest state-licensed auto title lenders, “is evading California’s newly-enacted interest rate caps through its recent partnership with an out-of-state bank.” Coupled with the California legislature’s passage of AB-1864, which will give the DBO (to be renamed the Department of Financial Protection and Innovation) new supervisory authority over certain previously unregulated providers of consumer financial services, the DBO’s announcement is an unsurprising but nonetheless threatening development for bank/nonbank partnerships in California and throughout the country.